Release Date: January 13, 2003

TULSA, OK - The U.S. Department of Energy has added four new projects to its "Technology Development with Independents Program." The program reflects the growing importance of small oil producers in supplying America's demand for oil and aims to help level the technology "playing field" for these companies.

Today, most of the unrecovered oil in the United States resides in fields operated by independent producers. Most of these producers are facing increasing economic and technical difficulties associated with harder-to-recover resources. Virtually none have the financial resources to conduct oil technology research. Increasingly, as larger oil companies cut back on research in the United States, smaller producers are relying on cost-sharing partnerships with the Department of Energy and its R&D network to develop novel approaches and improved methods to enhance oil recovery.

The "Technology Development with Independents Program" provides federal matching grants of up to $100,000 to small independent companies to test higher-risk technologies that can lower operating costs and extend the life of thousands of aging and often declining U.S. oil fields - fields that, in many cases, have been left behind by larger oil companies in favor of more lucrative opportunities overseas.

The Department of Energy's National Petroleum Technology Office in Tulsa, part of the National Energy Technology Laboratory, has selected the following projects to assist independent producers:

• Vecta Exploration, Inc. (Dallas, TX) will complete a shear wave seismic study documenting the imaging quality, costs, and potential benefits of combining S-wave and P-wave seismic data.

  Conventional 3D seismic survey methods today use only compressional (P) waves, or sound waves traveling in one direction. P-wave data is sufficient to identify the shape of a subsurface structure. However, successful drilling depends not only on the shape of the structure, but on locating rock fractures, detecting porosity trends, and locating subtle areas of trapped oil. Combining S-wave (sound waves traveling perpendicular to the P-wave) with P-wave data provides a more complete geologic "picture" of potential subsurface oil and gas bearing formations.

  This new imaging technology is considerably more expensive than conventional methods, but is expected to reduce drilling costs, increase oil discovery rates, and improve the recovery of bypassed oil. Vecta Exploration, Inc., together with the Exploration Geophysics Laboratory at the University of Texas at Austin, will process data from a six square mile seismic survey, and other industry sources, to document the differences between conventional and higher cost seismic methods. Widespread industry acceptance and application of S-wave imaging technology could result in the discovery of significant additional barrels of oil reserves across the oil-producing regions of the United States.

• St. James Oil Corporation (Laguna Hills, CA) will use a new hydrochloric-phosphonic acid solution to restore oil production in shut down wells in the Las Cienegas Field, located two miles from the downtown Los Angeles Civic Center.

  Las Cienegas Field wells that have been shut down for more than a year, and then returned to production, typically produce at rates 30 to 50 percent less than rates prior to shut down. This is due to severe calcium carbonate buildup, called "scale," that forms from water in a well at the end of production. This scale plugs up the rock, restricting the flow of oil into the well when it is started up again.

  Hydrochloric acid is known to dissolve scale, and is used extensively in oil operations throughout the world. The phosphonic acid reacts with minerals in the rock to form a temporary protective film, allowing deeper penetration and more effective reaction from the hydrochloric acid, inhibiting and reducing the formation of additional calcium carbonate scale. If successful, use of the hydrochloric-phosphonic acid solution could result in restarting hundreds of wells throughout the area.

• Crystal River Oil and Gas L.L.C. (Encinitas, CA) will test a new polymer gel treatment process that will restrict water production in oil wells on the Alameda Field in Kingman County Kansas. The project will mitigate excess water production which, when accompanied by low oil production, results in wells becoming unprofitable to operate and leads to early well abandonment and unrecoverable oil.

  When properly applied, polymer gel treatments are effective for reducing high water production and improving oil recovery. The gels move into highly permeable, water-saturated zones and severely reduce permeability to water so that oil can be produced from tighter rock.

  The new polymer gel is comprised of two chemicals: a powdered polyacrylamide polymer, which is a strengthening agent, and chromic acetate. Together they form a high strength thickened gel that will be pumped under high pressure into the selected wells. Each well will be left idle for 3-4 days, after which the wells will be returned to production.

  Successful demonstration of the polymer gel technology can provide a cost-effective solution applicable to a large number of wells across the country.

• Team Energy L.L.C. (Bridgeport, IL) will test the feasibility of using specially designed instrumentation that will control the ability of oil well pumping equipment to limit the volume of salt water produced from stripper wells. Limiting salt water production will reduce operating costs and mitigate environmental risks associated with handling and disposal of salt water.

  The proposed technology will monitor the well to pump off only the oil, and stop the pumps when water is detected in the produced stream. Two types of instrumentation, a fluid density meter and an inductive electrical conductivity meter, will be designed and tested simultaneously. Since the density and electrical conductivity properties differ between oil and water, the instrumentation should be able to detect which fluid is in the produced stream.

  This instrumentation is especially important since an estimated 400,000 stripper wells exist in the United States. These low volume wells produce a significant amount of salt water along with the oil. The relative amount of salt water usually increases over time as the well is produced and the oil is depleted, with a well producing as much as 100 barrels of salt water or more for every one barrel of oil recovered.

  Once a well is shut down and production stops, oil and water will continue to flow into the well. Over time the oil separates out above the water, and can be pumped from the well upon restart until the oil-water interface is reached. This cycle is repeated until the well becomes uneconomical to operate. However, the cycle is usually determined by trial and error, using a time clock to turn the pumping equipment on and off. The success of the proposed instrumentation techniques will greatly improve well pumping control and reduce the amount of produced water.

  Two active pumping wells, one idle well, and one flowing well in the Illinois Basin in Posey County Indiana will be used to confirm the effectiveness of the two different meters.

Since 1995, the "Technology Development with Independents Program" has provided small businesses in 19 states, each with less than 50 employees, the financial backing to test new techniques that might otherwise have remained untried.

The program is one of several initiatives in the Energy Department's fossil energy program that is working to slow or halt the decline in U.S. oil production. Companies that achieve success in the program convey the techniques to other small producers facing similar difficulties.